Ambidextrous Marketing Capabilities, Exploratory and Exploitative Market-Based Innovation, and Innovation Performance: An Empirical Study on China’s Manufacturing Sector

Round 1

Reviewer 1 Report

It would be interesting to look at the differences of results according to the industry type.

Author Response

Reviewer 1:

It would be interesting to look at the differences of results according to the industry.

We agree with you that it is very important to examine the potential moderating role of industry type. In fact, we had examined the potential moderating role of industry type but our data analysis results failed to support this hypothesis. That is why, we have used industry type as a control variable but not a moderator in this manuscript. Please find below how we tested the potential moderating role of industry type.

In fact, we firstly classified the samples into two categories, which were high-tech and non-high-tech enterprises. Then, we applied Multi-sample Analysis to test the moderating effect of industry type. We compared the unconstrained model with a series of constrained models (including exploratory marketing capabilities－exploratory market-based innovation；exploitative marketing capabilities－exploitative market-based innovation; exploratory/exploitative market-based innovation－innovation performance) in terms of changing χ2. We found that p value of Δχ2 is> 0. 10 (non-significant). This shows that, in this study, industry type did not significantly affect the following 3 relationships (between the exploratory marketing capabilities and the exploratory market-based innovation, between the exploitative marketing capabilities and exploitative market-based innovation, and between exploratory/exploitative market-based innovation and innovation performance).

Further, according to prior study, “industry type moderates the relationship between strategic orientations, exploitative learning and exploratory learning, and firm performance; ( 3) there are significant differential performance effects of the two kinds of strategic orientations in high-tech and non-high-tech firms. For high-tech firms, the performance effect of entrepreneurial orientation is larger than that of market orientation, however, for non-high-tech firms, it shows a contrary conclusion.” (Peng et al., 2015, p. 121). Therefore, even though the moderating effect of industry type is not significant, we still control it as one of the control variables in this research.

References:

Peng, Z., & He, P. (2015).The differential performance effects and the contingent choice of strategic orientations for enterprises: The mediating role of explorative and exploitative learning, and the moderating role of industry type. Management Review, 27(5): 121-134, 187. (in Chinese) 

Even though the moderating effect of industry type is not significant, our research findings further support the following result, which is also very interesting.

“Exploratory market-based innovation negatively moderates the relationship between exploitative market-based innovation and innovation performance, and exploitative market-based innovation also exerts a negative moderating effect on the exploratory market-based innovation—innovation performance association.” 

Last but not the least, in the future research, we will further examine "the differences of results according to the industry" in accordance with your suggestions.

Author Response File: Author Response.docx

Reviewer 2 Report

This study examines whether marketing capabilities and market-based innovation activities are both ambidextrous. Specifically, this study explored the relationships among enterprises’ marketing capabilities, market-based innovation and innovation performance with the sample of Chinese manufacturing firms in Fujian. Both hierarchical regression analysis and Bootstrapping methods are developed. The study finds that marketing capabilities and market-based innovation activities are both ambidextrous.

Further, ambidextrous marketing capabilities can enhance innovation performance significantly in which ambidextrous market-based innovation plays a partial mediating role in this relationship. Lastly, exploratory market-based innovation negatively moderates the relationship between exploitative market-based innovation and innovation performance, and exploitative market-based innovation also exerts a negative moderating effect on the exploratory market-based innovation—innovation performance association.

This is an interesting study. However, I have several suggestions:

• The motivations of this study should be further discussed. What is the contribution of this study compared with previous studies? This should be discussed explicitly in the introduction. Is it the first study in developing markets?
• In addition, I’m afraid the studies did not include all recent related studies on digital marketing capabilities, including papers in Sustainability such as Low et al. (2020) “Smart Digital Marketing Capabilities for Sustainable Property Development: A Case of Malaysia”.
• This study focuses on manufacturing sector. Why we focus on this particular sector? Can the results be generalised to other sectors?
• The use of Fujianese manufacturing companies also raises a question of generalisation. I reckon the authors should discuss further how this data can be generalised.
• This also raises a question of why the authors confine this study to Fujian.
• Some discussion is required why we differentiate both high tech and non high tech manufacturing firms.
• The study considers marketing capabilities and market-based innovation from both exploration and exploitation perspectives. A definition of exploration and exploitation capabilities and market-based innovation is required in the introduction. This provides a clear idea to readers the importance of this study.
• These being defined in Page 10:

“The marketing exploration capabilities scale intends to measure an enterprise’s ability to develop new skills, procedures, and marketing capabilities by applying new market-related knowledge.”

 

The marketing exploitation capabilities scale intends to measure an enterprise’s ability that “primarily involve improving and refining current skills and procedures associated with existing marketing strategies, including current market segments, positioning, distribution, and other marketing mix strategies”

 

• Why it is essential to examine the differences among them? Why we need to analyse these individually?
• This raises a fundamental question. The results are somewhat supported the developed framework in Figure 1. Marketing exploitation capabilities and marketing exploration capabilities will affect exploitation and exploration market-based innovation respectively. Eventually both affects the innovation performance of Chinese manufacturing firms. Then my question would be why we need to analyse these individually. Why can’t we analyse the firm’ marketing capabilities and market-based innovation as well as Chinese firms innovation performance directly?
• I have some hesitation for the ways of the authors categorise a dummy variable. See below: I am afraid the authors got into a dummy variable trap.

 

“…. and nature of ownership (1 = state-owned, 2 = private, 3 = foreign capital, 4 = other type) and industry type (1 = non-high-tech manufacturing, 2 = high-tech manufacturing) were coded as a dummy variable.

 

In order to avoid dummy variable trap , we always declare one less dummy variable (n-1) than the categorical values (n).

 

No of Dummy variables = categorical values -1 .

 

 

 

 

 

Author Response

Reviewer 2:

This study examines whether marketing capabilities and market-based innovation activities are both ambidextrous. Specifically, this study explored the relationships among enterprises’ marketing capabilities, market-based innovation and innovation performance with the sample of Chinese manufacturing firms in Fujian. Both hierarchical regression analysis and Bootstrapping methods are developed. The study finds that marketing capabilities and market-based innovation activities are both ambidextrous.

Further, ambidextrous marketing capabilities can enhance innovation performance significantly in which ambidextrous market-based innovation plays a partial mediating role in this relationship. Lastly, exploratory market-based innovation negatively moderates the relationship between exploitative market-based innovation and innovation performance, and exploitative market-based innovation also exerts a negative moderating effect on the exploratory market-based innovation—innovation performance association.

This is an interesting study. However, I have several suggestions:

1. The motivations of this study should be further discussed. What is the contribution of this study compared with previous studies? This should be discussed explicitly in the introduction. Is it the first study in developing markets?

Based on the literature review, this study is currently one of the three studies that work on the exploratory and exploitative market innovation models. The other two studies were published in Chinese core journals, namely: Zhang and Qiu (2013 ) examined the impacts of exploratory and exploitative market-based innovation on enterprises’ differentiation and low-cost advantages and performance; He et al. (2019) have examined the impacts of technical resources and marketing resources on exploratory and exploitative market-based innovation, as well as corporate strategic advantage and performance. Our research is based on the measurement of exploratory and exploitative market-based innovation conducted by Zhang and Qui (2013).

This research aims to enrich the research on the antecedents and consequences of innovation at the market level, exploring the differences between different modes of market-based innovation, and promoting enterprises to build a market-based innovation capability to improve performance.

Different from previous studies, our research makes the following contributions: First, this study is one of the few studies that explores the sources of corporate innovation performance from the market level, and is the first one that explores the impacts of marketing capabilities and market-based innovation activities on corporate innovation performance in developing markets. We take the lead in detailing and extending the role of marketing capabilities in promoting market-based innovation activities, combining capability factors with innovation models, and at the same time integrating innovation with market factors, linking the innovation management and marketing management together which has been called for further research by scholars; secondly, existing research still has little knowledge on relationship between marketing resources/capabilities and market innovation activities. Our study has back up the previous studies on marketing capabilities and market innovation; third, this research further provides implications for the balance of ambidextrous innovative activities at the market level.

2. In addition, I’m afraid the studies did not include all recent related studies on digital marketing capabilities, including papers in Sustainability such as Low et al. (2020) “Smart Digital Marketing Capabilities for Sustainable Property Development: A Case of Malaysia”.

Thank you for your precious suggestion! We have carefully read your suggested literature on digital marketing capabilities, and found that this article is indeed very enlightening for our research. Thank you for the knowledge sharing. We have added this reference in our reference list, and added the following statement to explain digital marketing capabilities in the introduction of the article. The specific content is as follows:

In the era of digital marketing, customers have more media channels to choose from (Low et al., 2020), and traditional marketing models affected heavily by Internet-based marketing. In a rapidly changing environment, especially due to COVID-19-induced lockdowns, the enhancement of digital marketing capabilities is becoming more and more important for companies to stay competitive in the global markets (Low et al., 2020). Therefore, Chinese companies urgently need to enhance digital marketing capabilities, implementing new media marketing concepts and new retail models, paying attention to the role of smart and sustainable digital technologies in the transformation of manufacturing product marketing models, and developing a digital marketing strategy.

Newly added references:

Low, S., Ullah, F., Shirowzhan, S., Sepasgozar, S. M. E., & Lee, C. L. (2020). Smart digital marketing capabilities for sustainable property development: A case of Malaysia. Sustainability, 12, 5402; doi:10.3390/su12135402

3. This study focuses on manufacturing sector. Why we focus on this particular sector? Can the results be generalised to other sectors?

The considerations for our study to focus on the manufacturing sector threefold. First, prior studies tend to focus on the product or technology level of innovation in enterprises (especially manufacturing enterprises), and rarely discuss the innovation at the market level. Therefore, this study aims to study "market-based innovation mechanism of manufacturing enterprises" which is underdeveloped in the prior research. Second, in recent years, some star companies in the Chinese manufacturing industry have performed well in market-based innovation. For example, both Xiaomi mobile phones (that has targeted the "enthusiast" market) and MediaTek (that develops low-end chip market) confirm that market-based innovation is more than technological innovation. In addition, some manufacturing companies have tried to carry out disruptive innovation and implement the "blue ocean" strategy, which also demonstrated the importance of market-based innovation for manufacturing companies from different angles. These examples of manufacturing companies show that it is feasible to collect data from manufacturing companies to study the mechanism of ambidextrous marketing capabilities, ambidextrous market-based innovation and innovation performance. Third, prior studies have rarely conducted research on ambidextrous marketing capabilities and market-based innovation for Chinese manufacturing companies. Zhang and Qiu (2013) took the lead in exploring the impacts of exploratory and exploitative market-based innovation on corporate competitive advantages and performance. They collected sample data from manufacturing and service industries. In our opinion, we consider that manufacturing and service industries may have differences in marketing capabilities and market-based innovation and it is more appropriate to study manufacturing industry in particular. Therefore, considering that Chinese manufacturing industry is currently under transition from being large to being competitive, and manufacturing companies are generally facing huge pressures of transformation, upgrading and market innovation, we therefore select manufacturing companies as the research target. As for the question "Can the results be generalised to other sectors?", we need to conduct follow-up studies for further examination.

4. The use of Fujianese manufacturing companies also raises a question of generalisation. I reckon the authors should discuss further how this data can be generalised.This also raises a question of why the authors confine this study to Fujian.

Several considerations lead us to collect data from manufacturing companies that locate in Fujian Province. First, Fujian Province is one of the most developed provinces. Manufacturing is the pillar industry of Fujian Province. Fujian Province is the first pilot zone of China’s "2025" strategy. Meanwhile, private manufacturing companies are well developed and which have experiences in working with foreign and domestic brands, they pay more attention to the promotion of marketing capabilities and market-baaed innovation to achieve their competitive advantage. Therefore, using manufacturing companies from Fujian as the sample shows representative effect.

Second, Chinese managers generally worry about information leakage. Therefore, it is proved that it is low in efficiency and return rate when researchers use random phone calls, questionnaires, and emails to contact companies through the corporate information found on the internet or yellow page. Referring to the previous research on the transitional economy market (Li et al., 2008; Zhang and Qiu, 2013), we use social network to send questionnaires and collect data. In China, in order to ensure the high return rate of completed questionnaires, it is usually necessary to establish a good cooperative relationship with the industrial park. Although we are "carrying out formal questionnaire surveys by random sampling through the business directory", these business directories are provided by the industrial park management committee that we are familiar with. We have obtained the prior consent of the industrial park management committee and then, management committee of the industrial park communicated the research objectives with the business leaders, who are assured the data confidentiality and agreed to participate in the research. The first author and corresponding author of this manuscript are in Fujian Province, it is convenient to make full of their social networks to collect data.

Third, with regard to data generalisation, it should be pointed out that our survey does not refer to enterprises in only one industrial park, and the sample enterprises are not only located in one city in Fujian Province. In fact, according to different economy development and existence of manufacturing enterprises, Fujian can be divided into developed coastal cities and underdeveloped cities close to inland provinces. Our sample companies include manufacturing companies from developed cities such as Fuzhou, Xiamen and Quanzhou (that are along the coast). There are also manufacturing companies from Longyan, Sanming, and Nanping cities (that are near the inland provinces, such as Jiangxi province). Our data is in fact collected from different cities that represent different economy levels, which ensures the sample representativeness.

Finally, thank you for your suggestions. We have highlighted this research limitation in terms of sample generalization in conclusion part. You can also find this new adding below.

This research is with limitations. First, due to time, energy and resource constraints, we only collected data from a single province in China, which may limit the generalizability of the research conclusions to a certain extent. Future research could apply our research framework in more regions and countries to examine the generalizability of the research conclusions; second, our data were collected from manufacturing enterprises. It is worth noting that manufacturing companies and service companies may have very different focus on marketing capabilities and market-based innovation. Therefore, in the future, researchers can further collect sample data from companies in different industries, conducting comparative studies, and expanding our research conclusions; third, this study uses the self-reporting method to collect data. This self-perception measurement method tends to be overestimated. 

References:

Li J J，Poppo L，Zhou K Z． Do managerial ties in China always produce value ? Competition，uncertainty，and domestic vs． foreign firms ［J］． Strategic Management Journal，2008，

29( 4) : 383－400．

Zhang F, Qiu W. Mechanism and balance of exploratory and exploitative market-based innovation. Journal of Management Science, 2013, 26(1), 1－13.

5. Some discussion is required why we differentiate both high tech and non high tech manufacturing firms.

Prior studies have worked on the innovation performance of Chinese high-tech manufacturing enterprises (see Duan et al., 2020), pointing out that innovation performance mainly includes product innovation/new product development performance, technological innovation performance, etc. (see Costa et al., 2018; Zhao et al., 2020). Therefore, we believe that whether a manufacturing company is a high-tech company may affect the research results, which needs to be controlled. According to your suggestion, we have added the following statement in the "3.1. Participants and procedure" section:

High tech manufacturing firms and non high tech manufacturing firms have huge differences in their products and market environment, and their dependence on technology and the market is not the same. Therefore, managers of these two types of enterprises may also have different focus in terms of their "exploration" and "utilization/development". Generally speaking, high tech manufacturing firms that master core technologies face less pressure from external competition, while traditional manufacturing firms that lack core competitive advantages are facing greater pressures to survive due to strong competition under the Chinese transitional economy. Therefore, both types of companies may invest differently in technological innovation and market innovation. More specifically, in terms of market-based innovation, high tech manufacturing firms advocate exploring and providing new value propositions that are different from those of traditional markets. They target new market segments, launching differentiated and customized products, and attracting new customers. Due to their relatively good reserves of technical resources, these companies have a strong willingness to develop new products and seek product differentiation advantages. They continue to pay attention to the features and functions of leading products with top technical standards, and tend to implement breakthrough innovative product strategies and exploratory market-based innovation strategies in emerging markets. Considering the non high tech manufacturing firms that tend to rely on low-cost advantages to increase market attractiveness, they implement incremental product innovation strategies for mature markets, and adopt exploitative market-based innovation models to reduce the cost of market-based innovation and operation. Obviously, both types of companies may show differences in their strategic focus and investment in traditional markets and emerging markets, exploratory/exploitative marketing capabilities, and exploratory/exploitative market-based innovation. Therefore, this study considers industry type as one of the potential influencing factors.

References:

Duan, Y., Wang, W., & Zhou, W. (2020). The multiple mediation effect of absorptive capacity on the organizational slack and innovation performance of high-tech manufacturing firms: evidence from Chinese firms. International Journal of Production Economics, 229. https://doi.org/10.1016/j.ijpe.2020.107754 

Costa, J. C. N. D., Camargo, S. M., Toaldo, A. M. M., & Didonet, S. R. (2018). The role of marketing capabilities, absorptive capacity, and innovation performance. Marketing Intelligence & Planning, 36(4), 410-424.

Zhao, L., Sun, J., Zhang, L., He, P., & Yi Q. (2020). Effects of technology lock-in on enterprise innovation performance. European Journal of Innovation Management. DOI 10.1108/EJIM-06-2020-0206

6. The study considers marketing capabilities and market-based innovation from both exploration and exploitation perspectives. A definition of exploration and exploitation capabilities and market-based innovation is required in the introduction. This provides a clear idea to readers the importance of this study.

These being defined in Page 10:

“The marketing exploration capabilities scale intends to measure an enterprise’s ability to develop new skills, procedures, and marketing capabilities by applying new market-related knowledge.”

The marketing exploitation capabilities scale intends to measure an enterprise’s ability that “primarily involve improving and refining current skills and procedures associated with existing marketing strategies, including current market segments, positioning, distribution, and other marketing mix strategies” 

We agree with your view that clearly explaining the definition of core variables in the introduction will help readers to better read and understand. To this end, we have carefully revised the introduction by further explaining the definitions of marketing exploration capabilities and marketing exploitation capabilities, market-based innovation and innovation performance. You can also find new adding below:

Marketing exploration capabilities reflects an enterprise’s ability to develop new skills, procedures, and marketing capabilities by applying new market-related knowledge (Atuahene-Gima, 2005; Kiriakopoulos and Moorman, 2004).

Marketing exploitation capabilities reflects an enterprise’s ability that “primarily involve improving and refining current skills and procedures associated with existing marketing strategies, including current market segments, positioning, distribution, and other marketing mix strategies” (Kiriakopoulos and Moorman, 2004, p. 221).

References:

Kyriakopoulos, K., & Moorman, C. (2004). Tradeoffs in marketing exploitation and exploration strategies: The overlooked role of market orientation. International Journal of Research in Marketing, 21(3): 219-240. 

Atuahene-Gima, K. (2005). Resolving the capability: Rigidity paradox in new product innovation. Journal of Marketing, 69(4): 61-83.

Market innovation refers to companies’ separation from the current mainstream market, exploring and providing customer values that are different from those of the mainstream market, developing new customer groups or new market segments (Zhang and Qiu, 2013).

References:

Zhang, F., & Qiu, W. (2013). Mechanism and balance of exploratory and exploitative market -based innovation. Journal of Management Science, 26(1): 1-13. (in Chinese)

Here, it is worth pointing out that research on the concept of innovation performance has been emerged in the last two years. Prior studies have rarely discussed this variable from an empirical level. Through the web of science and the Chinese China National Knowledge Infrastructure (CNKI) website, we used "innovation performance" as the keyword to search respective articles. Unexpectedly, the definition of innovation performance is rarely discussed in the existing literature. Most of the prior studies only discussed the measurement of innovation performance, including an article published in Sustainability Journal (see Lu and Yu, 2020). Among them, please find below the English references on innovation performance:

References:

Gimenez-Fernandez, E. M., Sandulli, F. D., & Bogers, M. (2020). Unpacking liabilities of newness and smallness in innovative start-ups: Investigating the differences in innovation performance between new and older small firms. 49. https://doi.org/10.1016/j.respol.2020.104049

Dahms, S., Cabrilo, S., & Kingkaew, S. (2020). The role of networks, competencies, and it advancement in innovation performance of foreign-owned subsidiaries. Industrial Marketing Management, 89, 402-421.

Duan, Y., Wang, W., & Zhou, W. (2020). The multiple mediation effect of absorptive capacity on the organizational slack and innovation performance of high-tech manufacturing firms: evidence from Chinese firms. International Journal of Production Economics, 229. https://doi.org/10.1016/j.ijpe.2020.107754 

Costa, J. C. N. D., Camargo, S. M., Toaldo, A. M. M., & Didonet, S. R. (2018). The role of marketing capabilities, absorptive capacity, and innovation performance. Marketing Intelligence & Planning, 36(4), 410-424.

Zhao, L., Sun, J., Zhang, L., He, P., & Yi Q. (2020). Effects of technology lock-in on enterprise innovation performance. European Journal of Innovation Management. DOI 10.1108/EJIM-06-2020-0206

Adams, P., Freitas, I. M. B., & Fontana, R. (2019). Strategic orientation, innovation performance and the moderating influence of marketing management. Journal of Business Research, 97, 129–140

Shu, C., Zhao, M., Liu, J., & Lindsay, W. (2020). Why firms go green and how green impacts financial and innovation performance differently: An awareness-motivation-capability perspective. Asia Pacific Journal of Management, 37: 795–821. https://doi.org/10.1007/s10490-018-9630-8

Falasca, M., Zhang, J., Conchar, M., & Li, K. (2017). The impact of customer knowledge and marketing dynamic capability on innovation performance: an empirical analysis. Journal of Business & Industrial Marketing, 32(7): 901–912.

Zhang, J. A., O'Kane, C., & Chen, G. (2020). Business ties, political ties, and innovation performance in Chinese industrial firms: The role of entrepreneurial orientation and environmental dynamism. Journal of Business Research, 121: 54–267.

Santoro, G., Bresciani, S., & Papa, A. (2020). Collaborative modes with Cultural and Creative Industries and innovation performance: The moderating role of heterogeneous sources of knowledge and absorptive capacity. https://doi.org/10.1016/j.technovation.2018.06.003

Li, G. (2020). The impact of supply chain relationship quality on knowledge sharing and innovation performance: evidence from Chinese manufacturing industry. Journal of Business & Industrial Marketing. DOI 10.1108/JBIM-02-2020-0109

Papa, A., Dezi, L., Gregori, G. L., Mueller, J., & Miglietta, N. (2020). Improving innovation performance through knowledge acquisition: the moderating role of employee retention and human resource management practices. 24(3): 589-605.

Lu, C., & Yu, B. (2020). The Effect of Formal and Informal External Collaboration on Innovation Performance of SMEs: Evidence from China. Sustainability, 12, 9636; doi:10.3390/su12229636

According to our literature review, we found that only Jiang and Kuang (2015), Xie and Wang (2020), Gimenez-Fernandez et al. (2020), Dahms et al. (2020) have defined innovation performance in their articles. We therefore have included and discussed their definitions on innovation performance in the introduction of this article. These contents are as follows:

Innovation performance refers to the increase in enterprise value due to the use of innovation capabilities, that is, the efficiency of transforming innovation input into results and the economic benefits. It is generally measured by indicators such as enterprise R&D investment, patent numbers or new products (Jiang and Kuang, 2015; Xie and Wang, 2020). Gimenez-Fernandez et al. (2020) described innovation performance as “proportion relative to turnover of new or strongly improved products that the company introduced to the market and that were new to the market” (p. 5) or “the share of turnover resulting from new or strongly improved products that the company introduced to the market and that were new to the market during the last three years” (p. 4). It is also understood to mean “the ability to create innovations along the dimensions of products and services, production methods and processes, management or marketing practices” (Dahms et al., 2020, p. 402).

References:

Jiang, B. B., & Kuang, H. B. (2015). Measurement of firms’ innovative performance based on “efficiency-output”: Literature review and conceptual framework. Science Research Management, 36(3):71-78. (in Chinese)

Xie, X., & Wang, H. (2020). The impact mechanism of network embeddedness on firm innovation performance: A moderated mediation model based on non-R&D innovation. Journal of Industrial Engineering/Engineering Management, 34(6): 13-28. (in Chinese)

Gimenez-Fernandez, E. M., Sandulli, F. D., & Bogers, M. (2020). Unpacking liabilities of newness and smallness in innovative start-ups: Investigating the differences in innovation performance between new and older small firms. 49. https://doi.org/10.1016/j.respol.2020.104049

Dahms, S., Cabrilo, S., & Kingkaew, S. (2020). The role of networks, competencies, and it advancement in innovation performance of foreign-owned subsidiaries. Industrial Marketing Management, 89, 402-421.

7. Why it is essential to examine the differences among them? Why we need to analyse these individually?This raises a fundamental question. The results are somewhat supported the developed framework in Figure 1. Marketing exploitation capabilities and marketing exploration capabilities will affect exploitation and exploration market-based innovation respectively. Eventually both affects the innovation performance of Chinese manufacturing firms. Then my question would be why we need to analyse these individually. Why can’t we analyse the firm’ marketing capabilities and market-based innovation as well as Chinese firms innovation performance directly?

Exploration model advocates relying on new knowledge or skills to develop new products/technologies, creating new markets, and developing new distribution channels. Exploitation model advocates relying on existing knowledge or skills to improve existing products/technologies, further developing current markets, and improving efficiency of existing distribution channels (Zhang and Qiu, 2013).

In recent years, the research on the impact of the two models on organizational performance and the balance between the two is attracting more attention of scholars, but most of prior studies are carried out from the technological innovation level, and few studies are based on the market level. Therefore, at the market level, especially in the manufacturing sector, existing studies have not given a clear answer on their respective impacts on performance and the balance between them. In other words, we have little knowledge about the balance of ambidextrous marketing capabilities and the path mechanism that affects corporate performance, boundary conditions, and how companies balance ambidextrous marketing capabilities. In view of this, our study focuses on marketing capabilities, differentiating marketing exploratory and marketing exploitative capabilities, and revealing the influencing mechanisms of these two marketing capabilities on corporate performance. If we only “analyse the firm’s marketing capabilities and market-based innovation as well as Chinese firms’ innovation performance directly”, the theoretical contribution of this article will be greatly reduced.

Vorhies et al. (2011) point out that both marketing exploratory capability and marketing exploitative capability significantly improve corporate performance, but their impact path mechanisms are different. In existing research, several studies (see for example Mehrabi et al., 2019; Peng et al., 2015a, 2015b) argue the importance to distinguish the different dimensions of marketing capabilities, and to examine their impact on corporate performance from the perspective of ambiguous marketing capabilities, but not only discussing the impact of marketing capabilities on corporate performance in general terms. In fact, we have found in previous studies that firm's marketing capabilities can exert direct impact on Chinese firms' performance, and market-based innovation can also exert direct impact on Chinese firms' performance. Therefore, the focus of our study is no longer about the impact of the overall marketing capabilities of an enterprise on overall market-based innovation and innovation performance, but we aim to examine the differences between marketing exploration capabilities and marketing exploitation capabilities, as well as their respective impacts on organizational performance.

At the same time, the research conclusions of this article include: Ambidextrous marketing capabilities can enhance enterprises’ innovation performance significantly, while ambidextrous market-based innovation activities play a partial mediating role on the relationship between ambidextrous marketing capabilities and innovation performance. Specifically, marketing exploration capabilities affect innovation performance through the partial mediating role of exploratory market-based innovation, while marketing exploitation capabilities affect innovation performance through the partial mediating role of exploitative market-based innovation. Based on this research finding, we can see that firm’s marketing capabilities can (partially) directly influence market-based innovation as well as Chinese firms’ innovation performance, because our conclusion is “partial mediating effect” while not “fully mediating effect”.   

References:

Peng, Z., He, P., & Li, Z. (2015a). Balance of Ambidextrous Marketing Capabilities, Strategic Positional Advantages and New High-tech Service Venture Performance. Journal of Management Science, 28(3): 115-129. (in Chinese)

Peng, Z., He, P., & Li, Z. (2015b). Strategic orientations, ambidextrous marketing activities and service firm performance: The moderating role of market competitive intensity. Economic Management, 37(6): 75-86. (in Chinese)

Zhang, F., & Qiu, W. (2013). Mechanism and balance of exploratory and exploitative market -based innovation. Journal of Management Science, 26(1): 1-13. (in Chinese)

Vorhies, D. W., Orr, L. M., & Bush, V. D. (2011). Improving customer-focused marketing capabilities and firm financial performance via marketing exploration and exploitation. Journal of the Academy of Marketing Science, 39(5): 736-756.

Mehrabi, H., Coviello, N., & Ranaweera, C. (2019). Ambidextrous marketing capabilities and performance: How and when entrepreneurial orientation makes a difference. Industrial Marketing Management, 77: 129-142.

8. I have some hesitation for the ways of the authors categorise a dummy variable. See below: I am afraid the authors got into a dummy variable trap.

“…. and nature of ownership (1 = state-owned, 2 = private, 3 = foreign capital, 4 = other type) and industry type (1 = non-high-tech manufacturing, 2 = high-tech manufacturing) were coded as a dummy variable.

In order to avoid dummy variable trap , we always declare one less dummy variable (n-1) than the categorical values (n).

No of Dummy variables = categorical values -1 .

Thank you for your suggestions on data analysis and processing. While conducting the data analysis, we have noticed the potential dummy variable trap problem. Inspired by the suggestions of prior studies in the area, in order to avoid dummy variable trap, we declared one less dummy variable (n-1) than the categorical values (n). Since authors’ mother tongue is Chinese, in China, scholars generally use dummy variable classification and expression such as “nature of ownership (1 = state-owned, 2 = private, 3 = foreign capital, 4 = other type)”, we should have paid attention to international standards when explaining dummy variable trap. This is an error caused by our negligence, but it does not affect the main research findings of this article. The dummy variable trap in this article can be eliminated. We have corrected the relevant description of dummy variable in the article according to your suggestion.

 

Author Response File: Author Response.docx

Reviewer 3 Report

Thank you for the opportunity to read and review your paper.

I believe the area of ambidextrous marketing capabilities offers a lot of opportunity for further inquiry, and innovation performance is always an area that is of interest to marketing and management scholars.

Please find my feedback and suggestions for review below. I hope this will be of value to you.

Introduction 

• I found the introduction section to be quite nebulous. Define innovation performance. What is it and why does it matter in context? With no definition of what is meant by innovation performance, the introduction section is difficult to follow, because there is no shared or established context for the construct under examination.
• Innovation performance (IP) is only defined in section 2 in the paper, and even then, it is quite scantily referenced in the manuscript.
• The crux of the research gap, as I read the manuscript, hinges on the fact that [extant research] has "failed to examine or analyze enterprises’ innovation activities and innovation performance outside the context of new product development." In addition, the authors state that there is a limitation in using only the number of patents as an assessment indicator for innovation performance (line 365). However, 3 out of the 5 measurement items used to measure an enterprise's IP relates to either the number of patents (IP1) or new product/service development (IP2 and IP4, and to a degree, perhaps IP3 as well). Please clarify why this was done if it is mentioned as a limitation to comprehensively measuring IP as a construct.
• The introduction should serve to sketch and build the research argument as best as possible, building on existing research. A number of statements are made without providing sufficient in-text citation or reference to previous reliable sources to corroborate these statements.
• An example of the above is the capability-activity-performance framework in line 60, which is not referenced or its relevance explained.
• Lines 66-67: "exploratory" what? and "exploitative" what? Exploratory activities? Exploitative activities? I re-read the March (1991) article from which the references stem and the author is quite explicit about what these refer to in the context of their article.
• A major shortcoming of the manuscript in its current form is that RBV, as the theoretical perspective, is only explicitly mentioned in the theoretical contribution section - line 548. Should the paper be read from the perspective of Teece's Dynamic Capabilities, or Day's Adaptive Marketing Capabilities? Or the RBV perspective?

General

• There are a number of very long sentences. This hinders clear communication. I would suggest that these are broken up into more concise and sensible sentences, each with its own purpose. Examples are: lines 60-65; lines 75-81; lines 107-110, lines 226-229; lines 259-263.
• The list of references needs to be reviewed for stylistic consistency and comprehensiveness. 
• The March (1991) citation seems to be a direct quote taken from the source – page numbers should be added, according to the journal’s referencing style.

Constructs

• Developing hypotheses:
  • First, operationalize the constructs (marketing exploration capabilities; marketing exploitation capabilities; innovation performance)
  • Second, conceptualize the relationships between constructs
  • Hypothesize the relationships
• What are ambidextrous marketing capabilities and ambidextrous market-based innovation? (line 133) This should be clearly conceptualized and/or contextualized. The measurement items are presented in line 327, but up until then, the reader is in the dark as to what exactly constitutes these constructs and how to define them.
• Page 4, line 150-165 --> market-based innovation: what aspects differentiate exploratory innovation in this context to be market-based? It is not clear.
• H3 hypotheses are not forthcoming, following the theoretical arguments provided. Why is there a mediated relationship? What is the theoretical basis for this postulation? 
• Page 8: conceptual model does not show the numbered hypotheses and the full constructs are not visible in the model.

The conclusion in lines 507-510 is not forthcoming. It would need to be unpacked to clearly articulate how the study achieved this particular conclusion.

I would suggest that the results are presented more clearly. Build a clearer pathway to connect the introduction, theoretical grounding, and conceptual model with each other. Defining the constructs more clearly and explicitly highlighting the theoretical premises would aid in doing that. 

All the best with your research!

Author Response

Reviewer 3:

Thank you for the opportunity to read and review your paper.

I believe the area of ambidextrous marketing capabilities offers a lot of opportunity for further inquiry, and innovation performance is always an area that is of interest to marketing and management scholars.

Please find my feedback and suggestions for review below. I hope this will be of value to you.

Introduction 

1. I found the introduction section to be quite nebulous. Define innovation performance. What is it and why does it matter in context? With no definition of what is meant by innovation performance, the introduction section is difficult to follow, because there is no shared or established context for the construct under examination.Innovation performance (IP) is only defined in section 2 in the paper, and even then, it is quite scantily referenced in the manuscript.

Thank you for the suggestion. We agree that clearly explaining the definitions of the core variables in the article will help readers better understand the key points of our research. Here, it is worth noting that scholars start to pay more attention to innovation performance in the last two years. Prior to this, scholars have seldom empirically examined innovation performance. Through the Web of Science and the Chinese China National Knowledge Infrastructure (CNKI) website, we used "innovation performance" as the keyword to search respective articles. Unexpectedly, the definition of innovation performance is rarely discussed in the existing literature. Most of the prior studies only discussed the measurement of innovation performance, including an article published in Sustainability Journal (see Lu and Yu, 2020). Among them, please find below the English references on innovation performance:

References:

Gimenez-Fernandez, E. M., Sandulli, F. D., & Bogers, M. (2020). Unpacking liabilities of newness and smallness in innovative start-ups: Investigating the differences in innovation performance between new and older small firms. 49. https://doi.org/10.1016/j.respol.2020.104049

Dahms, S., Cabrilo, S., & Kingkaew, S. (2020). The role of networks, competencies, and it advancement in innovation performance of foreign-owned subsidiaries. Industrial Marketing Management, 89, 402-421.

Duan, Y., Wang, W., & Zhou, W. (2020). The multiple mediation effect of absorptive capacity on the organizational slack and innovation performance of high-tech manufacturing firms: evidence from Chinese firms. International Journal of Production Economics, 229. https://doi.org/10.1016/j.ijpe.2020.107754 

Costa, J. C. N. D., Camargo, S. M., Toaldo, A. M. M., & Didonet, S. R. (2018). The role of marketing capabilities, absorptive capacity, and innovation performance. Marketing Intelligence & Planning, 36(4), 410-424.

Zhao, L., Sun, J., Zhang, L., He, P., & Yi Q. (2020). Effects of technology lock-in on enterprise innovation performance. European Journal of Innovation Management. DOI 10.1108/EJIM-06-2020-0206

Adams, P., Freitas, I. M. B., & Fontana, R. (2019). Strategic orientation, innovation performance and the moderating influence of marketing management. Journal of Business Research, 97, 129–140

Shu, C., Zhao, M., Liu, J., & Lindsay, W. (2020). Why firms go green and how green impacts financial and innovation performance differently: An awareness-motivation-capability perspective. Asia Pacific Journal of Management, 37: 795–821. https://doi.org/10.1007/s10490-018-9630-8

Falasca, M., Zhang, J., Conchar, M., & Li, K. (2017). The impact of customer knowledge and marketing dynamic capability on innovation performance: an empirical analysis. Journal of Business & Industrial Marketing, 32(7): 901–912.

Zhang, J. A., O'Kane, C., & Chen, G. (2020). Business ties, political ties, and innovation performance in Chinese industrial firms: The role of entrepreneurial orientation and environmental dynamism. Journal of Business Research, 121: 54–267.

Santoro, G., Bresciani, S., & Papa, A. (2020). Collaborative modes with Cultural and Creative Industries and innovation performance: The moderating role of heterogeneous sources of knowledge and absorptive capacity. https://doi.org/10.1016/j.technovation.2018.06.003

Li, G. (2020). The impact of supply chain relationship quality on knowledge sharing and innovation performance: evidence from Chinese manufacturing industry. Journal of Business & Industrial Marketing. DOI 10.1108/JBIM-02-2020-0109

Papa, A., Dezi, L., Gregori, G. L., Mueller, J., & Miglietta, N. (2020). Improving innovation performance through knowledge acquisition: the moderating role of employee retention and human resource management practices. 24(3): 589-605.

Lu, C., & Yu, B. (2020). The Effect of Formal and Informal External Collaboration on Innovation Performance of SMEs: Evidence from China. Sustainability, 12, 9636; doi:10.3390/su12229636

According to the literature review, we found that only Jiang and Kuang (2015), Xie and Wang (2020), Gimenez-Fernandez et al. (2020), Dahms et al. (2020) have defined innovation performance in their articles. We therefore have included their definitions on innovation performance in the introduction of this article. These contents are as follows:

Innovation performance refers to the increase in enterprise value due to the use of innovation capabilities, that is, the efficiency of transforming innovation input into results and the economic benefits. It is generally measured by indicators such as enterprise R&D investment, patent numbers or new products (Jiang and Kuang, 2015; Xie and Wang, 2020). Gimenez-Fernandez et al. (2020) described innovation performance as “proportion relative to turnover of new or strongly improved products that the company introduced to the market and that were new to the market” (p. 5) or “the share of turnover resulting from new or strongly improved products that the company introduced to the market and that were new to the market during the last three years” (p. 4). It is also understood to mean “the ability to create innovations along the dimensions of products and services, production methods and processes, management or marketing practices” (Dahms et al., 2020, p. 402).

References:

Jiang, B. B., & Kuang, H. B. (2015). Measurement of firms’ innovative performance based on “efficiency-output”: Literature review and conceptual framework. Science Research Management, 36(3):71-78. (in Chinese)

Xie, X., & Wang, H. (2020). The impact mechanism of network embeddedness on firm innovation performance: A moderated mediation model based on non-R&D innovation. Journal of Industrial Engineering/Engineering Management, 34(6): 13-28. (in Chinese)

Gimenez-Fernandez, E. M., Sandulli, F. D., & Bogers, M. (2020). Unpacking liabilities of newness and smallness in innovative start-ups: Investigating the differences in innovation performance between new and older small firms. 49. https://doi.org/10.1016/j.respol.2020.104049

Dahms, S., Cabrilo, S., & Kingkaew, S. (2020). The role of networks, competencies, and it advancement in innovation performance of foreign-owned subsidiaries. Industrial Marketing Management, 89, 402-421.

2. The crux of the research gap, as I read the manuscript, hinges on the fact that [extant research] has "failed to examine or analyze enterprises’ innovation activities and innovation performance outside the context of new product development." In addition, the authors state that there is a limitation in using only the number of patents as an assessment indicator for innovation performance (line 365). However, 3 out of the 5 measurement items used to measure an enterprise's IP relates to either the number of patents (IP1) or new product/service development (IP2 and IP4, and to a degree, perhaps IP3 as well). Please clarify why this was done if it is mentioned as a limitation to comprehensively measuring IP as a construct.

Scholars have mainly studied the innovation performance of high-tech manufacturing firms from the perspectives of technology imports, independent innovation, institutional environment, R&D investment, the introduction of high-tech talents, and acquiring external technology. 

What we have indicated in the manuscript “extant research has failed to examine or analyze enterprises' innovation activities and innovation performance outside the context of new product development” refers to the fact that prior studies have mainly focused on technology innovation and product innovation, while less attention has been paid to innovation activities at the market level and market-based innovation performance. Therefore, this article focuses on the influencing mechanism of marketing capabilities on corporate performance from the perspective of market-based innovation.

Prior studies tend to mainly used patent number and new products’ number when measuring innovation performance, or only use these two indicators for innovation performance measurement. Since our research aims to examine the impact of enterprise market-level innovation on enterprise performance, we have also included "market response" and "new market development" as measurement items for innovation performance. We admit that the IP measurement scale in this article has certain limitations. Since we have not found a scale specifically for measuring market-based innovation performance in the existing literature, we can only measure market-based innovation performance through a scale for innovation performance for the time being. Thank you for your suggestion. We have paid attention to this key issue, and will further sort out and pay attention to relevant literature in the follow-up research to find or develop a scale of market-based innovation performance.

3. The introduction should serve to sketch and build the research argument as best as possible, building on existing research. A number of statements are made without providing sufficient in-text citation or reference to previous reliable sources to corroborate these statements.

An example of the above is the capability-activity-performance framework in line 60, which is not referenced or its relevance explained.

Lines 66-67: "exploratory" what? and "exploitative" what? Exploratory activities? Exploitative activities? I re-read the March (1991) article from which the references stem and the author is quite explicit about what these refer to in the context of their article.

The “capability-activity-performance” framework proposed in this article is mainly based on prior studies on “marketing capabilities - technological innovation activities - market performance” (Chen and Yu, 2013), “dynamic marketing capabilities - customer value innovation activities - enterprise performance” (Li, 2013), “technology/market capability - green exploration and green exploitation - green enterprise innovation performance” (Xue, 2017) and so forth. These studies show that the marketing capabilities of a company will affect its performance by influencing its learning and innovation behavior (activities). We have added references in corresponding areas in the text.

References:

Chen, X., & Yu, T. (2013). An empirical study of the relationship among marketing capability, technological innovation and market performance: An empirial investigation based on the listed SMEs in China. Studies in Science of Science, 31(4): 585-595. (in Chinese)

Li, X. (2013). The relationship among dynamic marketing capabilities, customer value innovation and organizational performance in context of green entrepreneurship. Soft Science, 27(09): 60-63+72. (in Chinese)

Xue, J. (2017). Research on the effects of technology capabilities and marketing capabilities on innovation performance of green enterprises: The mediating roles of green exploration and green exploitation. Journal of South China Normal University (Social Science Edition), (03):50-57+190. (in Chinese)

Lines 66-67: “exploratory” and “exploitative” refer to exploratory learning and exploitative learning. According to March (1991), organizational learning has two types: exploratory and exploitative learning. Exploratory learning argues that organizational members break through existing norms, standards and conventions, constantly searching, experimenting, and creating new knowledge to improve organizational efficiency. Its behavioral characteristics are “searching, taking adventure, experimenting and innovation”, aiming to improve future benefits, searching for new business opportunities, developing new technologies and new capabilities. Exploitative learning refers to the excavation, refinement, extension and improvement of existing knowledge by organizational members, which promotes continuous small adjustments and improvements in various operational areas in the organizations. In other words, exploitative learning focuses on companies’ existing capabilities and technical levels, aiming to increase the benefits of existing businesses.

4. A major shortcoming of the manuscript in its current form is that RBV, as the theoretical perspective, is only explicitly mentioned in the theoretical contribution section - line 548. Should the paper be read from the perspective of Teece's Dynamic Capabilities, or Day's Adaptive Marketing Capabilities? Or the RBV perspective?

Thank you for your comment. The keywords of this article are marketing capabilities, ambidexterity, and innovation performance. Since we focus on marketing capabilities rather than marketing resources, we are more inclined to adopt Day's Adaptive Marketing Capabilities as the core theoretical perspective for this research. As known, market innovation could happen when there is marketing resources, and marketing capabilities are sometimes regarded by scholars as an important organizational resource. Therefore, we still consider that it is appropriate to apply RBV perspective in our research. In addition, give that our research includes ambidextrous marketing capabilities and ambidextrous market-based innovation, therefore, we also tend to draw on insights from the organizational ambidexterity literature. We have further highlighted the theoretical perspectives that we adopt in the corresponding areas in the article. For more details, please see the part marked in red in the article or see new adding below. 

“Day (2011) identifies the gap between current market needs and the marketing capabilities of companies to meet these needs, proposing the concept of adaptive marketing capabilities and the evolution path of marketing capabilities, which is about moving from static marketing capabilities to dynamic marketing capabilities and then to adaptive marketing capabilities. According to Day (2011), companies need three types of adaptive marketing capabilities, which are vigilant market learning, adaptive market experimentation, and open marketing. We believe that marketing exploration and exploitation capabilities provide a foundation for market learning and market experimentation, and thereby promote market-based innovation activities. Therefore, based on the adaptive marketing capabilities perspective, we believe that ambidextrous marketing capabilities have a significant impact on exploratory and exploitative market-based innovation and innovation performance.”

Reference:

Day, G. S. (2011). Closing the marketing capabilities gap. Journal of Marketing, 75(4): 183-195.

General

5. There are a number of very long sentences. This hinders clear communication. I would suggest that these are broken up into more concise and sensible sentences, each with its own purpose. Examples are: lines 60-65; lines 75-81; lines 107-110, lines 226-229; lines 259-263.

Thank you for your suggestion. In order to improve the readability of the article, the updated version of our manuscript has been proofread by native English speaker and a young researcher in the area that works for a top European business school. We have shortened the long sentences and made sure that they are as concise and sensible as possible.

6. The list of references needs to be reviewed for stylistic consistency and comprehensiveness. The March (1991) citation seems to be a direct quote taken from the source – page numbers should be added, according to the journal’s referencing style.

Thank you for the kind reminder. In the updated manuscript, we have carefully checked each reference and the citations in the article to achieve stylistic consistency and comprehensiveness. In the article, we directly quote the original sentence of March (1991). The page number has been added in the updated manuscript. You can find them in the main text or see detail below:

Since March [6] proposed the concepts of “exploratory” (“experimentation with new alternatives that have returns that are uncertain, distant, and often negative”) and “exploitative” (“the refinement and extension of existing competencies, technologies, and paradigms”) (p. 85) in organizational learning theory, the perspectives of ambidextrous capabilities (exploratory capabilities and exploitative capabilities) and ambidextrous innovation (exploratory innovation and exploitative innovation) have gradually won widespread acceptance among scholars [7–15].

Constructs

7. Developing hypotheses:

First, operationalize the constructs (marketing exploration capabilities; marketing exploitation capabilities; innovation performance)

Second, conceptualize the relationships between constructs

Hypothesize the relationships

What are ambidextrous marketing capabilities and ambidextrous market-based innovation? (line 133) This should be clearly conceptualized and/or contextualized. The measurement items are presented in line 327, but up until then, the reader is in the dark as to what exactly constitutes these constructs and how to define them.

Thank you for this comment. Reviewer 2 also commented on this point. We have added definitions of the core concepts of this article in the introduction, as follows:

Marketing exploration capabilities reflects an enterprise’s ability to develop new skills, procedures, and marketing capabilities by applying new market-related knowledge (Atuahene-Gima, 2005; Kiriakopoulos and Moorman, 2004).

Marketing exploitation capabilities reflects an enterprise’s ability that “primarily involve improving and refining current skills and procedures associated with existing marketing strategies, including current market segments, positioning, distribution, and other marketing mix strategies” (Kiriakopoulos and Moorman, 2004, p. 221).

Market innovation refers to companies’ separation from the current mainstream market, exploring and providing customer values that are different from those of the mainstream market, developing new customer groups or new market segments (Zhang and Qiu, 2013).

Exploratory market-based innovation emphasizes that companies rely on new market knowledge, using new market knowledge to create and develop new markets that target new customer groups, and request new distribution channels (Zhang and Qiu, 2013).

Exploitative market-based innovation emphasizes that companies make full use of their existing market knowledge, continue to explore existing markets while establishing a solid relationship with existing customer groups, identifying new demands that may appear in the existing market (Zhang and Qiu, 2013).

Innovation performance refers to the increase in enterprise value due to the use of innovation capabilities, that is, the efficiency of transforming innovation input into results and the economic benefits. It is generally measured by indicators such as enterprise R&D investment, patent numbers or new products (Jiang and Kuang, 2015; Xie and Wang, 2020). Gimenez-Fernandez et al. (2020) described innovation performance as “proportion relative to turnover of new or strongly improved products that the company introduced to the market and that were new to the market” (p. 5) or “the share of turnover resulting from new or strongly improved products that the company introduced to the market and that were new to the market during the last three years” (p. 4). It is also understood to mean “the ability to create innovations along the dimensions of products and services, production methods and processes, management or marketing practices” (Dahms et al., 2020, p. 402).

References:

Kyriakopoulos, K., & Moorman, C. (2004). Tradeoffs in marketing exploitation and exploration strategies: The overlooked role of market orientation. International Journal of Research in Marketing, 21(3): 219-240. 

Atuahene-Gima, K. (2005). Resolving the capability: Rigidity paradox in new product innovation. Journal of Marketing, 69(4): 61-83.

Zhang, F., & Qiu, W. (2013). Mechanism and balance of exploratory and exploitative market -based innovation. Journal of Management Science, 26(1): 1-13. (in Chinese)

Jiang, B. B., & Kuang, H. B. (2015). Measurement of firms’ innovative performance based on “efficiency-output”: Literature review and conceptual framework. Science Research Management, 36(3):71-78. (in Chinese)

Xie, X., & Wang, H. (2020). The impact mechanism of network embeddedness on firm innovation performance: A moderated mediation model based on non-R&D innovation. Journal of Industrial Engineering/Engineering Management, 34(6): 13-28. (in Chinese)

Gimenez-Fernandez, E. M., Sandulli, F. D., & Bogers, M. (2020). Unpacking liabilities of newness and smallness in innovative start-ups: Investigating the differences in innovation performance between new and older small firms. 49. https://doi.org/10.1016/j.respol.2020.104049

Dahms, S., Cabrilo, S., & Kingkaew, S. (2020). The role of networks, competencies, and it advancement in innovation performance of foreign-owned subsidiaries. Industrial Marketing Management, 89, 402-421.

Thank you for your suggestion. We have modified the formulation of the research hypotheses to make them more clear. The updated research hypotheses are shown below:

Hypothesis 1: Marketing exploration capabilities have a significant positive relationship with innovation performance; i.e., an increase in marketing exploration capabilities leads to an increase in innovation performance.

Hypothesis 2: Marketing exploitation capabilities have a significant positive relationship with innovation performance; i.e., an increase in marketing exploitation capabilities leads to an increase in innovation performance.

H3a: Marketing exploration capabilities have a significant positive relationship with exploratory market-based innovation; i.e., an increase in marketing exploration capabilities leads to an increase in exploratory market-based innovation.

H3b: Exploratory market-based innovation has a significant positive relationship with innovation performance; i.e., an increase in exploratory market-based innovation leads to an increase in innovation performance.

H3c: Exploratory market-based innovation mediates the relationship between marketing exploration capabilities and innovation performance.

H4a: Marketing exploitation capabilities have a significant positive relationship with exploitative market-based innovation; i.e., an increase in marketing exploitation capabilities leads to an increase in exploitative market-based innovation.

H4b: Exploitative market-based innovation has a significant positive relationship with innovation performance; i.e., an increase in exploitative market-based innovation leads to an increase in  innovation performance.

H4c: Exploitative market-based innovation mediates the relationship between marketing exploitation capabilities and innovation performance.

Hypothesis 5: Marketing exploration capabilities negatively moderate the positive relationship between marketing exploitation capabilities and exploitative market-based innovation; i.e., the stronger an enterprise’s marketing exploration capabilities are, the weaker the linkage between its marketing exploitation capabilities and exploitative market-based innovation. 

Hypothesis 6: Marketing exploitation capabilities negatively moderate the positive relationship between marketing exploration capabilities and exploratory market-based innovation; i.e., the stronger an enterprise’s marketing exploitation capabilities are, the weaker the linkage between its marketing exploration capabilities and exploratory market-based innovation.

Page 4, line 150-165 --> market-based innovation: what aspects differentiate exploratory innovation in this context to be market-based? It is not clear.

Prior studies have rarely discussed the difference and relationship between technology innovation and market innovation. Through literature review, we found that Xu et al. (2017) took the Chinese local cosmetics brand that is in the transitional economy context as an example, and examined exploratory/exploitative technological innovation and exploratory/exploitative market-based innovation in terms of their differences and relationships. More specifically, according to Xu et al. (2017), the innovative forms of exploratory technological innovation include new product research and development, and new product launches. The innovative forms of exploitative technological innovation include process upgrading, performance improvement, packaging improvement, etc. Exploratory market-based innovation includes market expansion, new market entry, new customer value, etc. Exploitative market-based innovation includes mainstream market maintenance, new sales channels, and customer value maintenance. They also pointed out that companies should choose different combinations of technological innovation methods and market-based innovation methods according to their own circumstances (such as the intensity of market competition and the turbulence of the technological environment, as well as the turbulence of the market environment and the intensity of technological competition).

In order to avoid confusion and cross using exploratory innovation and exploratory market-based innovation, we have modified the following segments that you pointed out as producing confusions:

“The results of exploratory innovation will have a close relationship with an enterprise's innovation performance. According to Benner and Tushman [31], enterprises can rely on exploratory market-based innovation to obtain advanced knowledge and technology in the fierce competition in markets, and they can employ this knowledge and technology to develop new products and processes, enabling them to occupy an advanced position in emerging markets. Zhou et al. [32] found that secondary innovation targeting existing products can uncover the potential economic value hidden within existing products. Rogan and Mors [33] showed that an enterprise's new product development and new markets occupation will alter the traditional market structure and create new market mechanisms, which will help the enterprise find new directions and create new values for customers. In addition, He et al. [34] suggested that exploratory innovation can help enterprises find new selling points of products and profit enhancement points, which can enable enterprises to achieve significantly greater profits. This reveals that exploratory market-based innovation will enable enterprises to continuously develop and explore new market opportunities, maintain long-term differentiated competitive advantage, and effectively boost the enterprise’s innovation performance.”

You can find the modifications below:

The results of exploratory market-based innovation will have a close relationship with an enterprise's innovation performance. Exploratory market learning and innovative methods enable companies to better meet the unique value demands of customer groups from low-end markets or emerging markets (Zhang and Qiu, 2013), promote the formation of differentiated characteristics of new products (Kim and Atuahene-Gima , 2010), and achieve the product differentiation(Zhang and Qiu, 2013). According to Benner and Tushman [31], enterprises can rely on exploratory market-based innovation to obtain advanced knowledge and technology in the fierce competition in markets, and they can employ this knowledge and technology to develop new products and processes, enabling them to occupy an advanced position in emerging markets. Zhou et al. [32] found that secondary innovation targeting existing products can uncover the potential economic value hidden within existing products. Rogan and Mors [33] showed that an enterprise's new product development and new markets occupation will alter the traditional market structure and create new market mechanisms, which will help the enterprise find new directions and create new values for customers. In addition, He et al. [34] suggested that, on the one hand, exploratory market-based innovation can provide companies with opportunities to perform better than other competitors by exploring transformative solutions in the process of new product development, to better meet customers’ needs; on the other hand, it can create a new consumer market and help companies form a new brand image that is different from that of competitors in the mainstream market. Xu et al. (2017) took a Chinese local cosmetics brand that is under the transitional economy as an example. They pointed out that innovative forms of exploratory market-based innovation include market expansion, new market entry, and new customer value. When the market environment is turbulent, companies should search for new markets to carry out exploratory market-based innovation, that is, through interaction, and cooperative learning, companies are able to obtain complex tacit knowledge about competitors and new markets, to figure out market gaps and achieve exploratory market-based innovation. All these efforts can lead to healthy development of the brand.

In sum, exploratory innovation can help enterprises find new selling points of products and profit enhancement points, which can enable enterprises to achieve significantly greater profits. This reveals that exploratory market-based innovation will enable enterprises to continuously develop and explore new market opportunities, maintain long-term differentiated competitive advantage, and effectively boost the enterprise’s innovation performance.”

References:

Kim, N., & Atuahene-Gima, K. (2010). Using exploratory and exploitative market learning for new product development. Journal of Product Innovation Management, 27(4): 519-536.

Zhang, F., & Qiu, W. (2013). Mechanism and balance of exploratory and exploitative market -based innovation. Journal of Management Science, 26(1): 1-13. (in Chinese)

Xu, H., Zhang, N., & Feng, Y. (2017). Research on growth mode selection mechanism of local brand under the background of transition economy-Based on the Case of Yu Mei Jing. Economic Management, 39(4): 113-127. (in Chinese)

H3 hypotheses are not forthcoming, following the theoretical arguments provided. Why is there a mediated relationship? What is the theoretical basis for this postulation? 

Thank you for your comment. Due to the fact that few prior studies are about market-based innovation, we admit that we face challenges in illustrating H3. In accordance with your suggestion, we have reviewed the latest literature on this subject in Chinese and English journals. Unfortunately, we still are not able to find significantly support to this hypothesis. We have taken the following two solutions to strengthen the development of H3 hypotheses, hoping to meet your requirements to a certain extent. If you have relevant literature in this area, we look forward to receiving them from you and integrate them in the manuscript. Thank you!

On the one hand, we strengthened the discussion on the relationship between marketing exploration capabilities and exploratory market-based innovation, through adding a new argument:

Ho et al. (2020) point out that marketing exploration emphasizes market experimentation and risk-taking, which can promote enterprises to explore new market segments and propose new solutions to meet the needs of potential customers. In other words, marketing exploration capabilities have help promote the market innovation.

On the other hand, we have added some illustration to explain the mediating role of exploratory market-based innovation (ie, “Why is there a mediated relationship?”):

 

In sum, based on marketing exploration capabilities, firms ‘design new products or services for marketplaces, create new markets and identify the needs of emerging customers and markets’ (Tsai and Wang, 2017, p. 735). As such, firms that primarily pursue marketing exploration usually create radical market-based innovation through exploring new market-related knowledge. The reason for hypothesizing the mediating role of exploratory market-based innovation is that marketing exploration capabilities are seen as a type of dynamic capability that can enhance firm performance gradually over time. While marketing exploration capabilities provides basic elements for achieving market-based innovation benefits, exploratory market-based innovation mode can facilitate the transformation of marketing exploration capabilities into feasible marketing activities to achieve favorable market-based innovation performance. This is t and the “capabilities-activities-performance” logic.

References:

Ho, H., Osiyevskyy, O., Agarwal, J., & Reza, S. (2020). Does ambidexterity in marketing pay off? The role of absorptive capacity. Journal of Business Research, 110: 65-79.

Tsai, M. C., & Wang, C. (2017). Linking service innovation to firm performance: The roles of ambidextrous innovation and market orientation capability. Chinese Management Studies, 11(4): 730-750.

Page 8: conceptual model does not show the numbered hypotheses and the full constructs are not visible in the model.

Regarding your comment that “the full constructs are not visible in the model”, this problem may be caused by changes in the format of the word version during the submission. In our submission documents, the concept model has all constructs. In addition, we have taken your comment “conceptual model does not show the numbered hypotheses” into consideration and made respective modifications. Please find the updated and completed conceptual model below:

 

 

 

 

 

 

 

The conclusion in lines 507-510 is not forthcoming. It would need to be unpacked to clearly articulate how the study achieved this particular conclusion.

Thank you for the comment. We reviewed lines 507-510 and we admit that conclusion in lines 507-510 cannot be derived from “ambidextrous marketing capabilities can influence innovation performance via ambidextrous market-based innovation activities. Specifically, marketing exploration capabilities and marketing exploitation capabilities, respectively, influence exploratory market-based innovation and exploitative market-based innovation activities”. Therefore, we moved lines 507-510 to the third point of “5.1. Conclusions”. For more details, please see the red font part of the corresponding session in the revised manuscript.

I would suggest that the results are presented more clearly. Build a clearer pathway to connect the introduction, theoretical grounding, and conceptual model with each other. Defining the constructs more clearly and explicitly highlighting the theoretical premises would aid in doing that. 

Thank you for all the suggestions and comments, we have tried our best to define the constructs more clearly and explicitly highlight the theoretical premises. However, for this comment on building a clearer pathway to connect different sessions, we do not understand it well and we do not know where to start building the clearer pathway. Can you please give us further instructions?

Thank you for all the precious comments, which allow us to improve the paper. In summary, in this round of revisions, we have tried our best to achieve the following points: first, better clarify concepts; second, enhance logic in illustration; third, supplement and strengthen arguments; fourth, further clarify the theoretical basis (theoretical perspective); fifth, highlight theoretical innovation and contribution; and sixth, improve writing style.

Author Response File: Author Response.docx

Round 2

Reviewer 3 Report

Well done on the thorough revision. Below are just some minor grammatical, spelling or typographical errors that were picked up. 

Line 132:

Our study has back up the previous studies on marketing capabilities...

Line 178:

...create new combinations that quite different from existing marketing rules...

Line 306:

...to achieve the strategic goal of differentiation, setting it apart...

Line 438:

representing a an overall response rate of 79%. Table 1 shows the results of the...

Line 446:

...different focus in terms of their “exploration”  

Line 496:

...relating to use new market knowledge to create

All the best with your future research endeavors.

Author Response

Reviewer 3: Minor revision Comments and Suggestions for Authors Well done on the thorough revision. Below are just some minor grammatical, spelling or typographical errors that were picked up.  Authors’ response: Thank you for giving us an opportunity to resubmit a minor revised manuscript for further consideration. Your suggestions are extremely helpful for us. We include a point-by-point response to your comments and highlight all changes in our revised manuscript, as required. Line 132: Our study has back up the previous studies on marketing capabilities... Authors’ response: We have changed this sentence to “Our study has enriched the marketing capabilities and market innovation literature.” Line 178: ...create new combinations that quite different from existing marketing rules... Authors’ response: We have changed this sentence to “...enabling it to create new marketing combinations that significantly different from existing marketing rules, standards, practices, and activities...” Line 306: ...to achieve the strategic goal of differentiation, setting it apart... Authors’ response: We have changed this sentence to “...to achieve a differentiation-based advantage.” Line 438: representing a an overall response rate of 79%. Table 1 shows the results of the... Authors’ response: We have changed this sentence to “representing an overall response rate of 79%.” Line 446: ...different focus in terms of their “exploration” Authors’ response: We have changed this sentence to “...managers of these two types of enterprises may also have different preferences in terms of ‘exploration’ and ‘utilization/development’.” Line 496: ...relating to use new market knowledge to create Authors’ response: We have changed this sentence to “...relating to use marketing knowledge to create...”

Author Response File: Author Response.docx